United States District Court, W.D. Virginia, Abingdon Division
W. Massie and Seth M. Land, Penn Stuart & Eskridge,
Abingdon, Virginia, for Range Resources-Pine Mountain, Inc.,
Range Resources-Appalachia, LLC, EQT Production Company, and
EQT Production Nora, LLC; and Jennifer Shaver Friedel, Shaver
Law Office, PLLC, Blacksburg, Virginia, for John J. Horschel,
Henry T. “Hank” Horschel, William B. Douglas,
Jr., Albert G. Friend, James F. Friend, and Jon Friend.
OPINION AND ORDER
P. Jones, United States District Judge
case involves a dispute over ownership of the gas estate on
land located in Virginia. The principal parties previously
moved for summary judgment, which I denied as to all parties,
and the case is set to proceed to trial. Defendants Range
Resources-Pine Mountain, Inc., Range Resources-Appalachia,
LLC, EQT Production Company, and EQT Production Nora, LLC
(collectively “Range/EQT”) have now moved to
dismiss the crossclaim asserted by defendants John H.
Horschel, Henry T. “Hank” Horschel, William B.
Douglas, Jr., Albert G. Friend, James F. Friend, and Jon P.
Friend (collectively “Horschels/Friends”).
thoroughly reviewed the procedural history and facts of this
case in my previous opinion denying summary judgment as to
all parties and will not repeat them here. Op. & Order
4-11, ECF No. 428. However, since I issued my opinion denying
summary judgment, certain events have occurred that warrant
time I denied summary judgment, John M. Lamie was serving
both as bankruptcy trustee for Yellow Poplar Lumber Company
(“Trustee”) and as counsel for Horschels/Friends.
A few days after I issued my opinion, the
plaintiffs sought to have Mr. Lamie removed as
Trustee due to an alleged conflict of interest. Mot. to
Appoint Substitute Bankruptcy Trustee, ECF No. 429. In
response, Mr. Lamie moved to withdraw as counsel for
Horschels/Friends. Mot. to Withdraw as Counsel, ECF No. 437.
I granted this motion and substituted Jennifer Shaver Friedel
(formerly Jennifer L. Shaver) as counsel for
Horschels/Friends. Order, ECF No. 443. Mr. Lamie continued to
represent the interests of Yellow Poplar as Trustee.
week later, defendants Range/EQT moved to dismiss the
crossclaim of Horschels/Friends for lack of standing. This
motion has been briefed by Range/EQT and Horschels/Friends
and is ripe for decision.
bankruptcy trustee “has capacity to sue and be
sued” on behalf of the estate. 11 U.S.C. § 323(b).
This standing to sue is exclusive to the trustee: “[i]f
a cause of action is part of the estate of the bankrupt then
the trustee alone has standing to bring that claim.”
Nat'l Am. Ins. Co. v. Ruppert Landscaping Co.,
187 F.3d 439, 441 (4th Cir. 1999); see also
Steyr-Daimler-Puch of Am. Corp. v. Pappas, 852 F.2d 132,
136 (4th Cir. 1988) (holding that when a “claim is
property of the estate, the trustee is given full authority
over it”). A bankruptcy estate includes “all
legal or equitable interests of the debtor in property as of
the commencement of the [bankruptcy] case.” 11 U.S.C.
§ 541(a)(1). A cause of action seeking a declaration of
ownership of property - such as the one raised here by the
Trustee and Horschels/Friends - is therefore part of the
estate if the estate possessed an interest in the property
when the bankruptcy proceeding began. See Vieira v.
Anderson (In re Beach First Nat'l Bancshares, Inc.),
702 F.3d 772, 776 (4th Cir. 2012) (noting that “[a]
debtor's right to bring a legal claim is part of the
bankruptcy estate under . . . § 541(a)”).
have moved to dismiss the claim of Horschels/Friends based on
this principle of trustee-exclusive standing. They state that
“[t]he Trustee and the Horschels/Friends have asserted
identical claims” and argue that because these claims
properly “belong to the bankruptcy estate, ”
Horschels/Friends lack standing to assert them. Mem. Supp.
Mot. to Dismiss 3-4, ECF No. 450. As a result, they say, the
claims of Horschels/Friends should be dismissed for lack of
subject matter jurisdiction.
response, Horschels/Friends argue that they “have a
significant interest in this matter, and are appropriate
intervenors under the law.” Mem. Opp'n Mot. to
Dismiss 2, ECF No. 453. They note that they are not
attempting to preempt the claim asserted by the Trustee and
argue that dismissing their claim “will have the
untenable effect of denying [them] the opportunity to pursue
their claims” and will allow Range/EQT to “escape
liability to Yellow Poplar.” Id. at 3. They
also protest that if they are dismissed from the action and
the Trustee is unsuccessful, their claim will be lost.
with Range/EQT that Horschels/Friends lack standing to pursue
their crossclaim. The claim raised by Horschels/Friends is
identical to that raised by the Trustee. Both parties seek
declarations that they own the gas interest on the relevant
property and that they are entitled to money damages. Because
they allege that this interest was owned by Yellow Poplar at
the time it entered bankruptcy, this claim is part of the
bankruptcy estate. Neither the crossclaimants nor Range/EQT
have suggested otherwise.
clear that the Trustee has standing to assert these claims of
the estate. See 11 U.S.C. § 323. The question
is whether this standing is exclusive to the Trustee or
whether Horschels/Friends, as successors in interest to
Yellow Poplar's shareholders or creditors, have such
standing as well. Yellow Poplar's bankruptcy occurred
under Chapter 11. The Fourth Circuit has not directly
addressed this question of standing ...